A company sells goods at a markup of 25% above the cost price. During a sale, the company offers a 10% discount on the marked price. If the customer pays Rs. 540 after the discount, then what was the original cost price of the goods?
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. Rs. 480.
Let the cost price of the goods = CP
The company marks up the goods by 25% above the cost price.
Therefore, the marked price (MP) = CP × (1 + 0.25) = 1.25 × CP
During the sale, the company offers a 10% discount on the marked price.
SP = MP × (1 − 0.10) = 1.25 × CP × 0.90
SP = 1.125 × CP
The customer pays Rs. 540 after the discount.
Therefore:
⇒ SP = 540
⇒ 1.125 × CP = 540
CP = 540/1.125 = 480